CAG raps HLL for poor market practices

The Comptroller and Auditor General (CAG) of India has heavily criticised the central public sector undertaking (PSU) HLL Lifecare Limited, which makes and markets a range of health care products. In its latest report to the health ministry, it said that the company has been making poor marketing policies, repeated failure in meeting turnover targets, loss in sales of its popular products over the past few years, according to report by DNA.

CAG has also criticised the company for being heavily dependent on a single buyer – the central government, where it faces long pending subsidy claims and supplies products in a negative margin.

The report also notes that there is a steep decline in sales of some of its products including popular condom brand Moods, calcium tablet HILCAL 500 and the antifungal medication HILZOL.

It said all this happened while HLL offered cash and quantity discounts to its clients in a bid to increase its turnover and that the company carried on the sales of the products without a proper pricing policy.

The report states that all domestic divisions of HLL failed to achieve respective targets in the past two years. Also the PSU has not evolved any “distinct, separate and documented marketing policy”, it did not charge any interest for delayed payments and had an outstanding of Rs 86.39 crore as on March 31, 2015, from clients under direct marketing and exports.

CAG also criticised the company’s decision to finance the export of iron ore from Bellary to China, where it made advance payments without obtaining adequate security.

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